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Foreign Ownership Translates into Higher Electric Bills

What exactly is a public utility? If you listen to the government officials in New York State, a foreign company is just dandy and will qualify from the Public Service Commission as a provider of electricity. While this may be old news, the continued adverse fallout from foreign ownership can no longer be flittered away. The latest approval of rate increases goes as an example of how the entire political favoritism system operates. The Buffalo N.Y. News reports, You’re likely to see higher electric bills soon.

“That proposed rate increase, averaging slightly more than 2 percent annually over three years, would add $5.19 to the average bill of a residential customer using 600 kilowatt hours of electricity, boosting it to $85.75 from $80.56 today, said Clay Ellis, a NYSEG spokesman.”

Remember the citizen reaction when, Iberdrola bought Energy East for $4.5 billion? If you forgot, the public rate payers put up a vigorous opposition that gained traction with the administrative judge at the public hearings. However, you can always count on the big nose of greedy politicians to place their thumb on the scales.

“Chuckie Schumer escorted Iberdrola in the back door here in New York State when he lobbied for the Sale of Energy East (NYSEG & RG&E here in WNY) TO Iberdrola back in 2007”

So explain why a sitting U.S. Senator has standing to compel state officials into approving a foreign corporation from an acquisition that the public was so vehemently against?

Once the Spanish company got in the door, more acquisitions occurred. Iberdrola Buys U.S. Power and Gas Distributor UIL.

“Iberdrola said the deal would help implement its growth plans in the U.S. through 2016, seeking to increase the company’s local footprint and a stronger focus on regulated businesses with stable cash flows.

Iberdrola U.S.A. also has the second-largest wind power generation portfolio in the U.S.”

Here is the real rub and the hidden motivation for giving favorable treatment to a foreign company. The miserable failure of industrial wind electric generation is so well established that most politicians are now reluctant to even mention the pie in the sky benefits from this extremely expensive and unreliable method of generation.

Examine the argument by Mary Kay Barton in Wind Power Destruction in New York State: ‘Clean’ Power Plan Problem, for a well thought out outline why wind power has been a total bust for the all the money spent on pushing it down the throats of beleaguered residents. Only the pockets of crooked officials are lined as Iberdrola runs away with cash while bleeding necessary maintenance dry.  

Add to this litany of real world objections, the ruthless record documented in the article, Iberdrola competition fine manipulate the price of electricity.

“The National Commission on Competition and Markets (CNMC) has imposed a fine of 25 million euros to Iberdrola Generación by manipulating the price of electricity, which is considered a very serious behavior.

Specifically, Iberdrola sanction relates to the actions carried out by increasing the price on the c Hydraulic entrales de Duero, Tagus and Sil, between 30 November 2013 and 23 December 2013.

Article 60th) 54/119 15 of the Act determines the electricity sector as a very serious offense any tampering aimed to alter the price of electricity or measuring the quantities delivered.”

I’m shocked, SHOCKED – Iberdrola penalized for fixing the price of electricity? Tell me this could not happen.

Over a year ago the report in the Democrat and Chronicle by Steven Orr, Electricity costs soar indicates:

“Residential customers served by Rochester Gas and Electric Corp. and New York State Electric and Gas Corp., both owned by Iberdrola SA, are not as bad off as others. Their average residential electric rates so far this month are 8 percent and 10 percent higher than January's, respectively. They've risen 15 percent and 16 percent since December, according to information on the companies' websites.

But customers of National Grid were warned several weeks ago that their electric costs could go up as much as 27 percent in the latest bills. The company reached a deal with New York state regulators that will allow it to spread those extra costs out over a number of months.

National Grid, the two Iberdrola companies and other investor-owned utilities in New York buy electricity and gas in the marketplace and pass it on to customers with no markup. The utilities make their money on delivery charges.”

Now National Grid is a UK company and Iberdrola a Spanish outfit, it is a convenience for these foreign companies to just provide delivery services and let the cost of electricity be a separate charge. The grid is limited in its capacity. Companies from Spain and the UK have long experience with industrial wind generation. Both know well, without massive government subsidies, the industry would never exist. Wind turbines only run on electricity, when the breezes stop blowing.

The True costs of wind electricity, concludes:

“We can only approximate the ‘true’ cost of wind, and how much the reality differs from ‘official’ EIA (and industry) claims. Wind resources have often been presented in a far more favorable light than they deserve. Looking at the costs presented here they are far higher than can be justified. It has been hoped that subsidies would make wind self-sustaining in short order, but wind appears no closer to economic viability today than years ago.”

When a foreign company with vast wind experience buys companies within the United States, they know wind turbines are a loser. Hey, so what, they say. They make their money on distribution services, which is determined by adding charges on base price of the electric. This lack of concern for the actual cost of the  wind generated power inevitably raises the cost of electricity to the end users. The system is structured to pass on these excessive costs to the consumer.

Welcome to the “PUBLIC UTILITY” culture brought to you by your corrupt elected officials and their obedient public service administration. At least if the electric user is to suffer under the hands of a greedy utility, can’t New York State regulate a domestic company?

James Hall – March 2, 2016

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